by Tim McInnis, Esq | Aug 7, 2019 | Uncategorized
Under traditional Medicare, beneficiaries receive an array of inpatient and outpatient healthcare services from hospitals, doctors and other providers who are reimbursed on a “fee-for-service” basis. In that environment billing fraud typically arises where the provider does not render the reported service and/or provides medically unnecessary services. Medicare Advantage, in contrast, is a managed care program that utilizes a “capitated” payment system. In that context private Medicare Advantage organizations (MAOs) receive a fixed amount of money per patient from the government and pay healthcare providers for their member-patients’ covered services, keeping what is not paid out as their profits. The amount of the capitated payment depends on the member-patients’ age, health, diagnoses and other physical and medical conditions (known as the risk adjustment score), as determined and reported by the MAOs. In an audit released on July 19, 2019, the Centers for Medicare & Medicaid Services (CMS), the agency overseeing the Medicare and Medicaid programs, estimated approximately $16 billion (or nearly 10%) of its payments to MAOs were improper because of incorrect risk adjustment scores.
Recent whistleblower cases have also revealed a number of schemes by which MAOs “game the system” by falsifying risk adjustment scores to make their member-patients appear sicker than they are in order to fraudulently obtain higher capitated payments. For example, in October 2018, HealthCare Partners Holdings LLC, a company owned by DaVita, agreed to a $270 million false claims settlement with the Department of Justice and a whistleblower. HealthCare Partners allegedly overstated its patients’ diagnoses and engaged in a “one-way” review of past diagnoses, looking for mistakes that led to lower payments from the government while ignoring mistakes that led to higher ones. The whistleblower in the case received more than $10 million.
Similarly, in December 2018, the Department of Justice joined a whistleblower lawsuit against Sutter Health, a California health system with 24 hospitals and more than 5,000 physicians. In that case, Sutter Health allegedly submitted false diagnosis codes for its patients. The whistleblower there reportedly tried to bring this to light internally before starting her lawsuit, but was ignored by the company.
And in January 2019, a federal whistleblower lawsuit against St. Louis-based Essence Group Holdings Corp. was unsealed. That case alleges Essence Group and its technology arm, Lumeris, and its local partner, Lester E. Cox Medical Centers, used data-mining software to identify patients for an “enhanced encounter” that artificially raised patients’ risk adjustment scores to boost Medicare payments. The company disputes these allegations and says it intends to fight the lawsuit. However, on July 15, 2019, a federal judge denied the defendants’ attempt to dismiss the whistleblower’s complaint. Relatedly, an April 2019 government audit found that Essence Group could not substantiate fees for a significant percentage of patients diagnosed with stroke or depression.
Call us anytime 212-292-4573
Call us anytime 212-292-4573
by Tim McInnis, Esq | Jul 13, 2018 | Our Cases
NEW YORK, July 10, 2018
McInnis Law announces the resolution
of three whistleblower lawsuits against Health Quest Systems, Inc., a hospital
system and network of healthcare providers headquartered in Lagrangeville, NY.
According to settlement agreements released on July 9, 2018, Health Quest will
pay the US $14.7 million and New York $880,000 to resolve allegations that it
violated the federal and state False Claims Acts by submitting inflated and
otherwise ineligible claims for Medicare and Medicaid reimbursement payments.
The settlements stem from three separate qui tam whistleblower lawsuits filed in
the federal district court in the Albany. They are: US, ex rel. F. v. Health Quest
Systems, Inc., No. 1:15-cv-396; US, ex rel. Cleary v. Health Quest Systems, Inc., No. 16-
cv-76; and US, ex rel. Betaudier and Carroll v. Health Quest Medical, Practice, P.C.,
et al., No. 1:16-cv-1344.
Page 1
The settlements cover allegations, which Health Quest admitted, that:
From April 1, 2009 through June 23, 2015, Health Quest submitted claims
for evaluation and management services but did not sufficiently document
the services and billed two levels higher than supported by the medical
records.
From April 1, 2011 through August 2014, Health Quest submitted claims for
home health services that lacked sufficient medical records to support the
claim, including documentation of a face-to-face encounter with a
physician.
From March 1, 2014 through December 31, 2014, Health Quest subsidiary
hospital, PHC, submitted allegedly false claims for inpatient and outpatient
services referred to PHC by two orthopedic physicians, in alleged violation
of the Physician Self-Referral Law and in violation of the Anti-Kickback
Statute.
McInnis Law represented whistleblower G. F., who filed the first of the three
whistleblower lawsuits against Health Quest. G. F. will immediately receive
$967,651, representing 15% of the total recovered from his case by the US and
New York. He has reserved the right to seek up to 25% of the proceeds he helped
recover, according to his attorney Timothy J. McInnis, of NYC-based McInnis Law.
“This case is remarkable because three unrelated whistleblowers filed separate
lawsuits using different lawyers and alleging different violations against the same
hospital system,” McInnis observed. “It really shows that the whistleblower
Page 2 of 3
procedures are working well, but it also shows something is grossly amiss with
some hospitals and healthcare providers,” noted McInnis.
CONTACT: Timothy J. McInnis, Esq., 1-212-292-4573, tmcinnis@mcinnis-law.com
SOURCE McInnis Law
by Tim McInnis, Esq | Jun 22, 2018 | Uncategorized
“NYC urgent care provider CityMD pays $7.4 million to US and NY to settle False Claims Act allegations for falsifying doctors’ names as the rendering providers, up-coding E&M charges and billing for unallowed facilities fees”
by Tim McInnis, Esq | Jan 4, 2018 | Our Cases
“Benslem PA Hospice Settles Whistleblower Suit for $2 Million”
(PDF)1 (PDF)2
by Author | May 2, 2017 | False Claims Act
New York Non-Profit Serving Developmentally Disabled Children and Adults Settles Whistleblower Complaint
Alleging False Billing at Queens and Brooklyn Day Habilitation Centers (New York City) — A non-profit serving the developmentally disabled in three states falsely billed New York State Medicaid for day habilitation client services for five years even though its own attendance records showed some developmentally disabled clients were not present, according to allegations in separate whistleblower settlements between the provider and New York State and federal governments, Manhattan-based Qui Tam Whistleblower Attorney Timothy J. McInnis of McInnis Law announced. Read More
SBIR Fraud
Medicaid Fraud
Education Fraud
Duty Fraud
by Author | Jan 29, 2017 | False Claims Act
The HHS OIG issued its work plan for 2017. This is significant to False Claims Act attorneys, relators and litigants because healthcare fraud continues to make up the largest share of FCA recoveries. The Office of Inspector General (OIG) is responsible for maintaining the integrity of the Health and Human Services (HHS) programs, including the Centers for Medicare and Medicaid Services (CMS). It does this by trying to identify, investigate and reduce improper payments and healthcare fraud, waste and abuse.
Here are some of the new and revised issues OIG will be focusing on in 2017:
Medicare Parts A and B
- Hyperbaric Oxygen Therapy Services – Provider Reimbursement in Compliance with Federal Regulations
- Incorrect Medical Assistance Days Claimed by Hospitals
- Inpatient Psychiatric Facility Outlier Payments
- Case Review of Inpatient Rehabilitation Hospital Patients Not Suited for Intensive Therapy
- Nursing Home Complaint Investigation Data Brief
- Skilled Nursing Facilities – Unreported Incidents of Potential Abuse and Neglect
- Skilled Nursing Facility Reimbursement
- Skilled Nursing Facility Adverse Event Screening Tool
- Medicare Hospice Benefit Vulnerabilities and Recommendations for Improvement, A Portfolio
- Review of Hospices Compliance with Medicare Requirements
- Hospice Home Care — Frequency of Nurse On-site Visits to Assess Quality of Care and Services
- Comparing HHA Survey Documents to Medicare Claims Data
- Part B Services during Non-Part A Nursing Home Stays: Durable Medical Equipment
- Medicare Market Share of Mail-Order Diabetic Testing Strips: April 1–June 30, 2016 –Mandatory Review
- Positive Airway Pressure Device Supplies – Supplier Compliance with Documentation Requirements for Frequency and Medical Necessity
- Intensity-Modulated Radiation Therapy
- National Background Checks for Long-Term-Care Employees – Mandatory Review
- Ambulance Services – Supplier Compliance with Payment Requirements
- Inpatient Rehabilitation Facility Payment System Requirements
- Histocompatibility Laboratories – Supplier Compliance with Payment Requirements
Medicare Parts C and D
- Medicare Part C Payments for Service Dates After Individuals’ Dates of Death
- Extent of Denied Care in Medicare Advantage and CMS Oversight
- Medicare Part D Rebates Related to Drugs Dispensed by 340B Pharmacies
- Questionable Billing for Compounded Topical Drugs in Part D
- Medicare Part D Payments for Service Dates After Individuals’ Dates of Death
Medicaid
- States’ MCO Medicaid Drug Claims
- Data Brief on Fraud in Medicaid Personal Care Services
- Delivery System Reform Incentive Payments
- Accountable Care in Medicaid
- Third-Party Liability Payment Collections in Medicaid
- Medicaid Overpayment Reporting and Collections
- Overview of States’ Risk Assignments for Medicaid-only Provider Types
- Health-Care-Related Taxes: Medicaid MCO Compliance with Hold-Harmless Requirement
- Health Care-Acquired Conditions – Medicaid Managed Care Organizations
CMS: Health Insurance Marketplaces
- CMS Oversight and Issuer Compliance in Ensuring Data Integrity for the ACA Risk Adjustment Program
- CMS Monitoring Activities for Consumer Operated and Oriented Plan Loan Program
For more information read https://oig.hhs.gov/reports-and-publications/archives/workplan/2017/HHS%20OIG%20Work%20Plan%202017.pdf
by Author | Jan 29, 2017 | False Claims Act
The U.S. Department of Justice announced False Claims Act Recoveries totaling $4.7 Billion in 2016 from successful False Claims Act cases. Of this overall amount, $2.5 billion came from the health care industry, primarily pharmaceutical companies, medical device equipment & equipment companies, hospitals, nursing homes, laboratories, and physicians. The second largest recoveries came from the financial services industry, with $1.7 billion, mainly involving underwriting and lending fraud in the residential mortgage markets.
According to DOJ, whistleblowers filed 702 qui tam suits under the False Claims Act in fiscal year 2016, and DOJ recovered $2.9 billion from these and earlier filed qui tam lawsuits. As a result, whistleblowers were awarded $519 million for cases that settled or were decided in court during 2016.
For more information read https://www.justice.gov/opa/pr/justice-department-recovers-over-47-billion-false-claims-act-cases-fiscal-year-2016
by Author | Feb 24, 2016 | Customs Fraud, False Claims Act, Qui Tam
On Monday, February 22nd, 2016, the Department of Justice announced that four Pennsylvania-based companies and two individuals had agreed to pay $3 million to settle a False Claims Act Suit involving customs duties. The companies—Ameri-Source International Inc., Ameri-Source Specialty Products Inc., Ameri-Source Holdings Inc., and SMC Machining LLC—and the individuals—Ajay Goel and Thomas Diener – were accused with evading customs duties on imports of small-diameter graphite electrodes from China, which are used as fuel in electric arc and ladle furnaces. The U.S. government alleged that the companies had deliberately misclassified the electrodes as a larger size from December 2009 to March 2012; because larger size electrodes are not subject to antidumping duties, the misclassification allowed the companies to evade the necessary customs duties for smaller size electrodes. The allegations resolved by the settlement were originally brought by whistleblower Graphite Electrode Sales Inc. under the qui tam provisions of the False Claims Act. Graphite Electrode Sales Inc., a competitor of the named defendants, will receive approximately $480,000 as its share of the settlement.
by Author | Feb 17, 2016 | False Claims Act
On February 11, 2016, HHS published the long-awaited final CMS OVERPAYMENT RULE. 42 CFR Parts 401 and 405. The rule requires providers and suppliers receiving Medicare Part A and Part B funds to report and return overpayments by the later of 60 days after the date on which the overpayment was identified; or any corresponding cost report is due, if applicable.
Here are some significant provisions that could affect False Claims Act litigation for reverse false claims based on wrongful retention of Medicare funds due to the failure to report and return overpayments:
- The rule is limited to Medicare and does not include Medicaid.
- The rule covers only “providers” and “suppliers” (Part A and Part B); MAOs, Medicaid MCOs and PDPs (Part C and Part D) were already addressed separately in a rule issued in 2014.
- The look back period would be 6 years (from when the overpayment was received), not 10 years as in the proposed rule from 2012.
- The overpayment would have to be properly reported and refunded within 60 days of when it is “identified.”
- “ Identified” means when a person “has, or should have, through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment.” (Or 60 days from when cost report reconciliation is filed, if applicable and if later).
- A reasonable amount of time to investigate an overpayment was received and to quantify the amount should not exceed 6 months, except in extraordinary circumstances.
- Overpayment Liability exists even if the overpayments were the result of inadvertence or innocent mistakes or errors; fraud conduct is not required.
- The amount of an overpayment is generally “the difference between the amount that was paid and the amount that should have been paid.” However, for claims tainted by violations of the Anti-Kickback Statute or Stark Law, CMS typically will view the overpayment as the full amount received by the provider.
- Sufficient documentation and medical necessity are longstanding and fundamental prerequisites to Medicare coverage and payment and can be the basis of overpayment liability.
- Providers cannot offset identified overpayments with identified underpayments.
- The rule becomes effective March 12, 2016.
See https://www.gpo.gov/fdsys/pkg/FR-2016-02-12/pdf/2016-02789.pdf
by Author | Jun 2, 2015 | False Claims Act
A recent SUPREME COURT FALSE CLAIMS ACT DECISION was handed down on May 26, 2014. Ending a trend of anti-relator rulings, this time, in Kellogg Brown & Root Services, Inc. v. United States ex rel. Carter, the Court handed out a split decision. It favored defendants by ruling that the Wartime Suspension of Limitations Act (WSLA) does not apply to civil actions under the False Claims Act. But, it gave relators new hope by holding that the so-called “first to file” bar, 31 U.S.C. § 3730(b)(5), applies only when there is a case that is “pending” at the time a related case is filed. If the prior case is dismissed for whatever reason, the first to file bar is not applicable to a second filed case.
What are the implications of this Supreme Court False Claims Act Decision? With respect to time bar limitations, one has to continue to be vigilant about pursuing meritorious FCA cases as soon as possible and certainly within 6 years under the FCA’s statute of limitations period, 31 U.S.C. § 3731(b). As for the new interpretation of the first to file bar, relators and their counsel should be more willing to consider filling cases even when there is reason to believe that a similar case has already been filed because it might have been dismissed. Relators and counsel may also want to review former cases that were dismissed on first to file grounds to make sure the correct standard was applied. Even if the first to file bar does not preclude a second filed action, however, there may still be a number of procedural hurdles that a second in time relator will face. These include the public disclosure bar, the statute of limitations and principles of res judicata. An already complicated issue just became more so.
